Events ramp up

Mobile World Congress took place last month in Barcelona; CTIA’s annual event opens today in Orlando.

But Canadians don’t have to go far to see what is happening in communications. The Toronto Congress Centre is hosting two major events this year. My regular readers know about The Canadian Telecom Summit, Canada’s leading event for the communications and information technology sector, which is taking place this year on May 31 – June 2 in Toronto. [You really need to be there.]

But, do you also know that this year will see a return of a wireless industry trade show to Canada? The Canadian Wireless Trade Show is coming to Toronto September 15-16. I met with the founders yesterday over breakfast. Jay and Sunny are a couple of wireless industry entrepreneurs who are looking to target the hot mobile devices and accessories market. An increasing number of channels for the service providers are independent dealers; the trade show will provide an opportunity for them to learn about additional ways to satisfy customers and their love of their mobile devices.

The event is timed for right after the Back-to-School period and before the crunch at Christmas.

Compare the selection of accessories at an official carrier store and the kinds of things you see at kiosks and independent stores and you will get an appreciation for the range of toys that can be offered to customers to personalize their devices. Opportunities are available for companies to get involved with The Canadian Wireless Trade Show as sponsors, exhibitors and participants.

It has been nearly a decade since the last major trade show operated in Canadian telecom. It was good to see the enthusiasm that Jay and Sunny are bringing to this venture. I wish them all the best in organizing their inaugural event.

Playing by the rules

There was an important footnote to the CRTC’s revised process for reviewing wholesale high speed internet billing.

In Telecom Notice of Consultation CRTC 2011-77-1, the Commission notes that this proceeding will fall under the new rules of procedure that come into effect for proceedings with a public comment period after April 1. There is a footnote that reads:

The Rules of Procedure set out, among other things, the rules for the filing, content, format and service of interventions and interrogatories, the procedure for filing confidential information and requesting its disclosure, and the conduct of the public hearing. Accordingly, the procedure set out in this notice must be read in conjunction with the Rules of Procedure and its accompanying documents, which can be found on the Commission’s website under “CRTC Rules of Practice and Procedure”.

The filing of comments may be the most important point for individuals participating in a CRTC process for the first time. They should start by reading the CRTC’s page that provides General questions and answers about the new converged Rules of Procedure.

Elevator pitch

The FCC put its 3 goals into a single tweet. It was the ultimate elevator pitch:

3 FCC goals: modernize Universal Service Fund; remove barriers to bband adoption; unleash spectrum for mobile broadband.

Agree with them or not, the FCC was able to clearly set out its priorities. They were described more fully in an address [pdf] from FCC Chair Julius Genachowski.

Industry Minister Tony Clement has talked about delivering Canada’s national digital strategy in the coming months. It is the culmination of an inter-ministerial consultation launched a year ago, together with Heritage and Human Resources. It is certain to be a magnum opus – I wonder if there will be a printed version, or will Canada’s digital strategy will exist only in digital form?

More important than the form will be the substance and the follow-up. Can we focus on clear priorities?

Will the highlights of the digital strategy be able to be expressed as succinctly as the FCC set out its goals?

Full disclosure

The BCE / CTV decision from the CRTC reveals the importance of full disclosure in regulatory proceedings.

Broadcasting Decision CRTC 2011-163 received a lot of attention because of the interest in Canada’s increased level of vertical integration, which will be the subject of a hearing in June.

There are a couple lines in the BCE / CTV Decision that merit mention because they indicate the benefits of full disclosure when asked by the CRTC to produce evidence.

During the oral hearing, the CRTC asked for the financial model [around line 399 of the transcript] used by PwC in developing the valuation of the transaction. PwC said that the model was its intellectual property and that it does not normally release the spreadsheet:

It’s policy at PWC that we do not distribute the actual financial models that we prepare as part of our valuation work unless it is explicitly contemplated that provision of the model is part of our engagement.

The model was used to allocate the purchase price between TV and radio, which is important, since TV attracts a 10% “tangible public benefit” and radio only attracts 6%. Since the model was said to have a 10% range of accuracy, the CRTC adjusted the allocation by that tolerance, shifting more than $32M from radio to TV. The four percentage point differential appears to have resulted in about $1.25M in additional tangible benefits being allocated.

It leads one to wonder if it would have been less costly to adjust PwC’s engagement to permit sharing the model with the CRTC.

What is wrong with profit?

I’ll say it: on a retail level, maximizing profit should be how broadband prices are set.

Why is profit a dirty word?

Look at the messaging from the “Stop the Cap” group protesting plans by AT&T to introduce a new usage sensitive component to its pricing for broadband.

Stop the Cap! has been reviewing AT&T’s financial reports looking for justification for imposing usage controls on the company’s customers. Most providers who enact these kinds of pricing schemes claim they are about controlling heavy users, reducing congestion, and covering the costs to provide the service.

But after reviewing some of AT&T’s financial reports, the only explanation apparent for these limits is a quest for additional revenue and profits from subscribers.

Whew. I am glad to hear that. I was worried that AT&T was raising prices in order to quash demand and scare away customers. Instead, they seem to be doing it in order to have more money, which is what businesses are supposed to do. Money that lets AT&T pay salaries to its nearly 300,000 employees, pay $10B in dividends to the pension plans and individual shareholders who invested in the company and pay billions in taxes to the government. Oh, and let’s not forget that AT&T is using $20B of its cash to invest in more capacity.

The so-called investigation by Stop the Cap! appears to be a witch hunt against corporations doing what they are supposed to be doing: making money. Of course, as consumers we all prefer to pay less. Shop around. If you think the big carriers are making too much profit, buy their shares.

Wholesale is a completely different matter. But as far as retail is concerned, what is wrong with profit?

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